The ‘unclaimed’ amounts lying in the dormant accounts of the Employees Provident Fund Organisation (EPFO) could be far less than what records indicated, official sources claim. Reconciliation of entries under a recently launched cleaning drive has reduced the unclaimed amount by Rs 3,000 crore, they said, adding that as the process continues, the problem might look less daunting.
While 90% of the accounts that had showed Rs 10 lakh or above were verified, it has become clear that in many cases, it was merely an issue of unreconciled entries, sources said. The retirement fund body intends to complete the validation of all the dormant accounts with Rs 50,000 or more in the next one year.
“We are reconciling the entries. Some Rs 3,000 crore that was not due (to the subscribers) was getting reflected in the system,” Central Provident Fund commissioner KK Jalan told FE. Asked what amount is still termed unclaimed, he said: “It changes everyday because an account becomes inoperative when it crosses three years without claims. Today the amount is more than R38,000 crore.”
Curiously, in many cases, the holders of the inoperative accounts do not want to take back the money, even as they are aware that they don’t get any returns on them. Jalan said: “We did one survey in Chandigarh. There were 186 accounts with more than R10 lakh unclaimed amount in each of them. We have found 150 of them were not true (after reconciliation). The holders of the balance 36 accounts were contacted and asked to take their money back. Most of them, however, refused to do so.”
Roughly, two-thirds of the unclaimed PF monies are in accounts dormant for more than five years.
An EPFO account without fresh deposits becomes inoperative (which means no interest accumulation) if it lies unclaimed for three years.
Apart from seeking the private sector’s cooperation, the EPFO has launched a nationwide campaign and an online help desk to enable people to trace their accounts and claim the amounts. More than 30,000 people have been serviced since January.
The total corpus of EPFO now stands at a little over Rs 6.5 lakh crore. By the end of the current fiscal, it is likely to go up to anything between Rs 7.5 to 7.7 lakh crore.